Central station

If you're the boss of a big construction company, using one, simple, electronic portal to buy everything from stationery to steelwork sounds ideal.

But if you're the construction manager who has to say goodbye to special deals with your local builders merchant and rely on a team of buyers in head office to make your procurement decisions, you may not be so happy.

Jarvis is one construction company who decided to splash out on a one-stop-shop procurement system, in an attempt to slash millions off its procurement budget. It has spent £16m and 14 months on implementing the Oracle system, which went live last July.

The system is expected to pay for itself in three years. However, it hasn't all been plain sailing. Subcontractors have complained of late payment due to teething troubles with the system, and Jarvis admits it underestimated the amount of customisation and training needed to get its staff using the system effectively.

Using the portal, all orders, from a bag of cement to computers to subcontract packages are ordered through it, which allows Jarvis to negotiate bulk, group-wide deals and cut its supply base. It isn't possible to buy any other way in Jarvis, except for very small purchases. Site managers are issued with credit cards with low limits to use at local builders merchants that Jarvis has framework agreements with. So if you run out of nails, you don't have to wait two days for them to turn up.

But what do the staff who use it think about it? Robert Terry, commercial manager for Jarvis says that the introduction of the Oracle system has led to a change in site culture. "No one likes anything new. People want to carry on doing things the way they always have, and it takes a big change in culture to overcome that. Many site managers have had to change from scribbling orders down on a requisition pad to using technology that they haven't encountered before."

The system Allows jarvis to negotiate bulk, group-wide deals and cut its supplier base

The loss of local buying autonomy can also be an issue. Steve Killeen, a commercial manager at engineer WS Atkins says there has been some resistance to its Barclays B 2 B reverse auctions portal, which it has been using for a year at a cost of £20,000 per auction per year. "It has been an issue that local businesses feel some of their autonomy has been taken away, but generally once they understand the benefits they are okay with the system. And we still use localised arrangements where it's appropriate, where logistics come into play, for example."

Terry says it hasn't been much of a problem at Jarvis. "Some people feel loss of autonomy is an issue, but it's not been so much of a problem. As long as they can see the benefits, they are happy."

WS Atkins' system retains an important human element, says Killeen. "Face-to-face negotiations still have to take place. A lot of thought and preparation is required to make the auction work. It isn't appropriate for all services and makes most sense for products such as stationery that are boxed in standardised amounts. I have used it to buy concrete, for example, but logistics have to be factored into the procurement process and negotiations still have to take place."

The human element is more lacking in the Oracle portal. "There are strict protocols on the system, which takes time to get used to," says Terry. "Our accounts, for example, are now centralised and managed through the system. Previously suppliers could phone up local offices and talk to the person they always spoke to, to get something changed. That can't be done now. It takes away the human element, but also the possibility for error."